Solar subsidy cuts slash 12,000 jobs

A third of solar jobs have likely been lost in the UK, found the report by PwC for the Solar Trade Association (STA), based on a survey of 238 companies, around 10% of the industry. More than 12,000 solar power jobs have been lost in the past year because of government subsidy cuts, according to the industry, with almost four in 10 companies are considering leaving the market entirely.

The losses are in addition to around 1,000 jobs that disappeared when several companies went into administration in a matter of weeks last year, but less than some dire predictions that forecast 18,000 jobs being axed.

Almost four in 10 companies are considering leaving the solar market entirely, and three in 10 told the survey they expected to employ fewer people in a year’s time. But half said they expected no change in staff levels and a fifth expected to increase numbers.

Leonie Greene, a spokeswoman for the STA, said: “The survey shows very regrettable damage to the fabric of the British solar industry and the need for prompt government action.”

The trade body blamed cuts to subsidy regimes made since the Conservative government took power last May, including a 65% reduction in payments for householders considering solar on their rooftop. Installations plummeted in February and March after the cuts took effect.

Nick Boyle, the CEO of Lightsource, which is one of the UK’s biggest solar companies, said he had been deeply disappointed by the changes. Jonathan Selwyn, the director of Solar Consulting Ltd, told the survey: “The UK is currently a very challenging market for solar companies.”

There is around 10GW of solar power installed in the UK, up from almost nothing in 2010 and 5GW by the end of 2014. But the report warned solar’s meteoric rise was over and not returning any time soon.

“The rapid growth seen in 2014 and early last year will not be seen again under the current policy environment and while grid parity [cost parity with conventional power plants] remains out of reach,” it said.

The industry is also worried that its woes will be worsened by Brexit. “Concerns about solar investment will be exacerbated by the decision to leave the European Union and the expectation of a turbulent period of economic adjustment,” the PwC authors warned.

In May, new solar panel installations and the closure of several coal power plants saw solar generate more than coal over a month for the first time. On several days the amount of electricity produced from coal dropped to zero.

The government defended the reductions in solar support, which are levied on energy bills, by saying it needed to protect householders and businesses from rising energy costs. At the time, solar subsidies accounted for around £10 of an average annual household bill of £1,338.

The prospects for new solar in the UK are bleak in the short term but could be more hopeful in the longer run. While the recent abolition of the government’s climate department led to criticism that Theresa May was downgrading action on climate change, ministers in June committed to ambitious new carbon targets for 2030.

Greene said: “There are many good economic reasons to back the British solar including minimising the cost of decarbonising our power supply to retain competitiveness, while creating exceptionally large numbers of jobs.”